js bank limited

JS Bank Limited

Interim Condensed Financial Statementsfor the nine months period endedSeptember 30, 2008 (Un- Audited)

for the nine months period ended 2008 01

Contents

Company Information

Directors’ Report to the Share Holders

Interim Condensed Balance Sheet

Interim Condensed Profit & Loss Account

Interim Condensed Cash Flow Statement

Interim Condensed Statement of Changes in Equity

Notes to the Interim Condensed Financial Statements

02

03

04

05

06

07

08

JS Bank Limited

for the nine months period ended 200802

Company Information

Board of Directors Mr. Jahangir Siddiqui ChairmanMr. Mazhar-ul-Haq SiddiquiMr. Maqbool A. SoomroMr. Ashraf NawabiMr. Rafique R. BhimjeeSyed Amjad AliMr. Basir Shamsie

President &Chief Executive Officer Mr. Naveed Qazi

Audit Committee Mr. Jahangir Siddiqui ChairmanMr. Maqbool A. Soomro MemberMr. Rafique R. Bhimjee Member

Human ResourceCommittee Mr. Jahangir Siddiqui Chairman

Mr. Naveed Qazi MemberSyed Muhammad Shoaib Omair Member/Secretary

Risk ManagementCommittee Mr. Jahangir Siddiqui Chairman

Mr. Naveed Qazi MemberMr. Ashraf Nawabi MemberSyed Amjad Ali MemberMr. Akbar Hasan Khan Secretary

Company Secretary Mr. Muhammad Yousuf Amanullah

Auditors Ford Rhodes Sidat Hyder & Co.Chartered Accountants

Legal Advisors Bawaney & PartnersLiaquat Merchant Associates

Share Registrar Technology Trade (Pvt.) Limited241-C, Block-2, P.E.C.H.S., Karachi.

Registered Office JS Bank LimitedShaheen Commercial ComplexDr. Ziauddin Ahmed RoadP.O. Box 4847 Karachi-74200, Pakistan.


Naveed QaziPresident and Chief Executive Officer

DIRECTORS’ REPORT

Karachi: October 29, 2008 On behalf of the Board

On behalf of the Board of Directors, I am pleased to present the un-audited financial statements for thenine months period and third quarter ended September 30, 2008.

Pakistan’s economy continues to remain under stress mainly led by pressures on the external and monetaryfront. After registering an average annual growth rate of 6.8% during last 5 years (FY03-07), the economyexperienced sluggish growth of 5.8% in FY 08 primarily due to a global economic and domestic politicaluncertainty. The ever widening trade deficit and lack of any major foreign inflows has put immense pressureon forex reserves. The tight monetary stance and economic slowdown has started to affect the bankingindustry which had been witnessing double digit annual growth in advances, deposits and profitability forthe last 5 years. However, given Pakistan’s under bank status (advances to GDP ratio of 29%) there remainssignificant untapped long term potential in the banking sector.

Your bank has closed the nine months period at a net profit of Rs 122.57 million. Total assets of the bankhave continuously shown an upward trend and have reached to Rs 21.88 billion as at September 30, 2008.Our deposit book has witnessed a steady growth with Rs 14.70 billion at September 30, 2008. To managethe cost of funds, the management will continue with its strategy to gradually increase the proportion ofcurrent and saving deposits carrying a lower rate of return as compared to other high yielding deposits,in its total deposit mix.

With challenges posed by the volatile political and economic conditions, the bank is pursuing a balancedgrowth approach without compromising the quality. Our long term strategy is to make the bank one ofthe best players in the market. Our focus will be on quality lending and expansion of branch network. Ascommunicated earlier, by the end of this year we will be a bank with a branch network of 39 online branchesacross Pakistan. Expanded branch network, is expected to result in a positive contribution to the financialperformance of the bank in the years to come.

The Board is pleased to announce one Right Share for every five Shares held i.e. 20% at par value of Rs. 10/- per share in its meeting held on September 29, 2008. By the issuance of right shares, we will be able tomeet the minimum capital requirement of the State Bank of Pakistan up till December 31, 2009. Availabilityof further equity will enable us to explore permissible business avenues for ultimate increase in earningsof the bank and to aggressively expand our branch network.

The Pakistan Credit Rating Agency Limited while assigning a positive outlook, has maintained the long-term and short-term entity ratings of the Bank at A- (“Single A minus”) and the short term rating at A2 (“ATwo”). These ratings denote a low expectation of credit risk emanating from a strong capacity for timelypayment of financial commitments.

We would like to express our sincere thanks and gratitude for the guidance provided by the State Bank ofPakistan, the Securities and Exchange Commission of Pakistan, the Karachi Stock Exchange and otherregulatory authorities. We would also like to thank our valued clients for their continued patronage andconfidence. The Board would also like to place on record its appreciation for the hard work, dedication,professionalism and sincere efforts of the senior management, officers and staff of the Bank at all levels.


INTERIM CONDENSED PROFIT AND LOSS ACCOUNT (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2008

JS Bank Limited


INTERIM CONDENSED CASH FLOW STATEMENT (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2008


INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2008

1. STATUS AND NATURE OF BUSINESS

JS Bank Limited (the bank), incorporated in Pakistan, is a scheduled bank, engaged in commercial banking and related services. The bank is listed on Karachi Stock Exchange in Pakistan. The bank is a subsidiary of Jahangir Siddiqui & Company Limited. The registered office of the bank is situated at Shaheen Commercial Complex, Dr. Ziauddin Ahmed Road, Karachi and it operates with eleven branchesand ten sub-branches in Pakistan (December 31, 2007: nine branches).

2. STATEMENT OF COMPLIANCE

These interim condensed financial statements have been prepared in accordance with the approved accounting standards as applicable to banks in Pakistan and the requirements of the Companies Ordinance, 1984 and the Banking Companies Ordinance, 1962. Approved accounting standards compriseof such International Financial Reporting Standards (IFRSs) as notified under the provisions of the Companies Ordinance, 1984. Wherever the requirement of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962 or directives issued by the Securities and Exchange Commission of Pakistanand the State Bank of Pakistan (SBP) differ with the requirement of these standards, the requirement of the Companies Ordinance, 1984, Banking Companies Ordinance, 1962, or the requirements of the said directives take precedence.

The SBP as per BSD Circular No.10 dated August 26, 2002 has deferred the applicability of IAS 39, "Financial Instruments: Recognition and Measurement" and IAS 40, "Investment Property" for bankingcompanies till further instructions. Accordingly, the requirements of these standards have not been considered in the preparation of these interim condensed financial statements. However investmentshave been classified and valued in accordance with the requirements of various circulars issued by SBP.

The disclosures made in these interim condensed financial statements have been limited based on theformat prescribed by the SBP vide BSD Circular letter No. 2 dated May 12, 2004 and IAS 34, "Interim Financial Reporting". They do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the financial statements of the bank for the year ended December 31, 2007.

3. ACCOUNTING POLICIES

The accounting policies adopted in the preparation of these interim condensed financial statements are the same as those applied in the preparation of the annual financial statements of the bank for theyear ended December 31, 2007.

JS Bank Limited


NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS (UN-AUDITED)FOR THE PERIOD ENDED SEPTEMBER 30, 2008


5.1.1 This includes investment in Azgard Nine Limited, a related party, amounting to Rs.79.378(December 31, 2007: Rs.194.575) million at market value.

5.1.2 This includes investment in Pak American Fertilizer Limited,amounting to Rs.149.97(December 31, 2007: Rs.150) million and Azgard Nine Limited ,amounting to Rs.149.97(December 31, 2007: Rs.nil) million which are related party.

5.1.3 Included herein are investments in following related parties:

a) UTP Large Capital Growth Fund and JS Value Fund (formerly BSJS Balance Fund),aggregating to Rs.239.251 (December 31, 2007: Rs.319.383) million at market value,which are designated as strategic investments by the bank.

b) Crosby Dragon Fund amounting to Rs.138.710 (December 31, 2007: Nil) million atmarket value.

(330,315)5,497,8455,059,685

(330,220)

JS Bank Limited


6.1 This represents call lending, amounting to Rs.40 million, provided to a borrower against whichthe bank had made a provision of Rs.10 million in prior periods. Further, in May 2007, thislending was restructured by the bank. Upon receiving relaxation under R-4.2(d) and R-8 of thePrudential Regulations for Corporate / Commercial Banking from the SBP vide its letterNo. BPRD/BRD-3/Corp/2007/7534, dated July 24, 2007, the bank has reclassified the saidlending as an unsecured loan.


Commitments in respect of forward exchange contracts

70, 2157, 225

405, 966483, 406

JS Bank Limited


10. RELATED PARTY TRANSACTIONS

Related parties comprise the parent company, directors and key management personnel of the bank and its parent. The bank in the normal course of business carries out transactions with various related parties. The transactions with the related parties are made at normal market prices.

The detail of transactions with related parties during the period are as follows:

the interim condensed


JS Bank Limited


JS Bank LimitedHead Office:Head office:Shaheen Commercial ComplexDr. Ziauddin Ahmed Road, P.O. Box 4847Karachi-74200, Pakistanwww.jsbl.com

Phone: +92 21 263 0343-49UAN: +92 21 111-JS-BANK (111-57- 2265)Fax: +92 21 263 1803

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